Chancellor Gordon Brown last week made his pre- Budget statement.While most of the announcements had been leaked in the weekend press in the run-up to it on Monday, there were a few shocks such as the removal of residential properties from the changes to self-invested pension plans, set to come into effect in April 2006. So, Mortgage Strategy asks: “Does the pre-Budget statement help or hinder the mortgage market?
James Rodea, Cluttons Private Finance – I wasn’t surprised at all that the chancellor made the changes he did to SIPPs. The changes he has made don’t go far enough in helping the middle classes save for retirement. I saw the proposed pensions changes as a way of helping the wealthy pay less tax. I read recently that the Countryside Alliance was worried about the effects of people owning second homes in the country so this will appease the likes of them. It’s quite good that he has come out early and said that you cannot invest in your main residence or wine rather than perpetuate uncertainty. But where were the further changes to Stamp Duty?Melanie Bien, Savills Private Finance – The changes made to the rules on SIPPs are disgraceful. It was astonishing that a Labour government introduced this in the first place but to pull it so late in the day when people have invested money in setting up products and services is terrible. He could have said this a long time ago and saved people millions. Peter Williams, Council of Mortgage Lenders – Though the package of measures designed to address housing supply may mean we still fall well short of the Barker targets, we are heading in the right direction. The private funding for equity loans, though modest in scale, will give us real experience of operating a public/private support scheme for first-time buyers. If it succeeds it could, over time, lead to a welcome increase in the flexible options in the housing market. Jeff Knight, GMAC-RFC – It appears only three lenders will participate in the pilot shared equity scheme so I wait to see what the details will bring. I would like to see more lenders given the opportunity to get involved – though not all would – so as to increase consumer choice and therefore, ultimately, the sustainability of the initiative. Mehrdad Yousefi, Alliance & Leicester – I welcome plans by the government to try and make more affordable housing available for the rising number of families seeking homes. So far this year A&L has seen rising first-time buyer business and we are interested in anything that helps more people make their dream of becoming home owners a reality. Ray Boulger, John Charcol – The questions that need answering are: who will have access to the shared equity scheme, and why is the government being so parsimonious with the funding? Helping only 20,000 first-time buyers by 2010 will hardly make a dent in the problem. And it is disappointing that the government will fail to meet its target date of April 2006 for the start of the scheme. James Cotton, London and Country – Before last week, property developers were marketing flats with a 40% discount for SIPP investors. But the truth is that only a small minority of affluent people would have really benefited from the original SIPPs proposals so the effect of this policy U-turn on the mortgage market should be minimal.